How to avoid fees and charges on your savings and transaction accounts
Previously, we covered the basics on savings and transaction accounts and we are here again to do a deep dive into the common fees and charges for these types of accounts which you might not be aware of and how you can avoid them.
Like credit accounts, savings and transaction accounts can also cost us monthly fees and other charges, so before you sign up to your first bank account or make a jump to a different bank, it pays to understand the fees and charges that can take place in order to keep your accounts running.
How much can a Savings and/or Transaction Account cost?
As we touched on in our previous post, a savings account is a good option if you have a savings goal, such as a home deposit, car, holiday, wedding or even just some emergency funds to put on the side. On the other hand, transaction accounts are a daily essential in order to manage our finances, such as utilising cash, receiving payments and paying bills.
However, did you know there are generally five types of fees and charges common to both accounts that may cost your hard-earned money?
Common fees & ways to avoid them
- Monthly account-keeping fees
This is the account maintenance fee to keep your account running. Many transaction accounts charge monthly fees for the privilege of holding your money.
Savvy Tip: If you hold a savings account, check with your bank if they can waive this charge off if you deposit a certain amount every month to account. Some providers also waive the monthly fee for students and seniors if you can provide the relevant identification.
- Transaction fees
This includes EFTPOS, electronic payments, ATM withdrawal and over-the-counter fees. Especially for savings account holders, fees will typically occur on this type of account as it is designed to encourage good savings behaviour and not transactional purpose.
Savvy Tip: Use a transactional account for any transactions and find one that has a low fee or fee-free banking features. Avoid withdrawing from ATMs not affiliated with your bank.
- Electronic funds transfer (EFT) and automatic payment set-up fees
Some banks don’t charge for either of these fees, but it’s important to check your statements regularly to ensure you are not getting charged for something you are not aware of.
- Branch withdrawal and deposit fees
Dealing with a bank teller face-to-face to manage your finances can cost you money every time you deposit or withdraw money.
Savvy Tip: You can usually avoid this fee by organising everything to be paid electronically instead (just make sure there aren’t fees for electronic transfers!).
- Paper statement fees
Are you still getting your statements by mail? Switch to online statements to view and download your account history information to avoid this fee. You can usually do this via your internet banking portal or your bank’s mobile app.
There are many fee-free savings and transaction accounts in the market, therefore, it is important to do your research thoroughly to find the right account that suits your needs, and don’t be afraid to raise this question with the potential financial institutions you plan to bank with.
You can check out a variety of different savings & transaction accounts at Credit Savvy and be sure to read the terms and conditions before signing up.